Bwin.party's woes continue as H1 revenues fall 6%
Regulated markets account for 60% of total revenues as tax and regulation hits bottom line
The Point of Consumption tax in the UK and VAT charges in other European jurisdictions contributed to a 6.5% fall in bwin.party’s revenues for the first half of the year, the company announced this morning amid further speculation over its future.
Total revenues for the six-month period ended 30 June 2015 fell from 317.1m last year to 296.5m in H1 2015 however clean EBITDA rose 2% to 47.3m and would have increased 24% were it not for the VAT and PoC charges.
The figures come as 888 and GVC battle it out to acquire the entire bwin.party business, a situation CEO Norbert Teufelberger described as “complex”.
“Whilst it has taken some time to get to where we are right now, it’s clearly not about the journey but about the result,” he said. “The recommended offer from 888 represents a substantial premium to the group’s share price before discussions began in earnest. Whether there is a subsequent, higher offer, we will have to wait and see.”
The firm pushed ahead with its strategy of shifting from volume to value, with 60% of revenues now coming from regulated markets compared with 54% in the comparable period last year.
Revenues were down across all verticals apart from bingo which remained relatively flat with revenues of 26.9m thanks to TV ad campaigns for its Foxy Bingo and Cheeky Bingo brands driving a 27% increase in player signups.
Sportsbook revenues were down 13% year-on-year to 111.1m due to the absence of the FIFA World Cup and lower margins, while poker suffered particularly badly with revenues falling by almost a quarter to 33.9m. Casino game revenues were down 5% to 98.4m.
But it was not all doom and gloom for bwin.party, as revenues through mobile increased 50% to represent 30% of gross gaming revenue across all verticals, compared with 19% in 2014.
Around 35% of new player signups came through the channel in H1 compared with 14% in January 2014.
“Based upon our progress in the year-to-date and with the further roll-out of our latest mobile products, the introduction of new CRM tools and planned entry into two new nationally regulated markets later this year, we remain confident about the full year outlook,” Teufelberger, said.
Bwin.party said it was on-track to exceed the 15m of additional cost savings in 2015 it originally targeted. Meanwhile its planned disposal of non-core assets such as the World Poker Tour and social gaming division Win was “running ahead of schedule” having already hit its target of proceeds of up to 50m.
The battle to acquire bwin.party is ongoing, with the operator still in talks with GVC despite board members unanimously recommending the offer made by 888.
Yesterday, bwin.party issued a call to GVC to submit its “best offer” to acquire the firm.
Peel Hunt analyst Nick Bartram said bwin.party deleivered better EBITDA number than he was expecting but the results also demonstrte the “size of the challenge faced”.
“There are signs of underlying progress at bwin.party but there is still much to be done. Its days of independence are numbered, the question just remains who will be victorious. Whoever the ultimate victor is, the upside should be significant,” he added,
Bwin.party’s share price was down 1.4% to 113.68p.